Asian Companies Slower to Adapt Social Media: Culture or Cost-Effectiveness?

After considerable hand-wringing, many global companies have adopted a social media presence. Their goals are varied, but connecting with customers, proactive reputation building, enhancing employee commitment and grabbing opportunistic sales are among them. Research suggests that Asian companies have been less enthusiastic about social media. There could be many reasons for this - and it is always dangerous to generalize -but the following article by Aude Lagorce in Marketwatch explores the reasons:

"Faced with a massive fridge recall in Australia last year, South Korea’s LG Electronics did something bold: it tweeted about it.

By Western standards, the move may not seem particularly daring, but in an Asian culture where the fear of “losing face” underlies most decisions, it was nothing short of revolutionary. And it won the firm a crisis-management award.

LG’s approach, however, remains the exception, as Asian firms eye digital media warily. Only 40% of the region’s top firms use branded media channels like Facebook and Twitter for corporate marketing purposes, compared to 79% globally, and just 12% have corporate blogs, compared to 33% worldwide, a recent survey by public-relations firm Burson-Marsteller found.

“The Asian multinationals are far more tentative and circumspect with respect to social media than their Western counterparts,” said Bob Pickard, Burson-Marsteller Asia Pacific chief executive.

The reasons behind Asian firms’ slow embrace of the digital world are numerous, complex and vary by geography and industry, but at the root, they are cultural.

Setting up a page on Facebook or launching a corporate blog gives a firm a “face” with its stakeholders, helping to make it seem more approachable, caring and responsive.

That’s the upside. The downside, as many early adopters found out, is that when something goes wrong or customers are unhappy, having an online presence via a blog or a social-media site exposes the company to very direct and public criticism.

No wonder many brand executives mourn the days of the straightforward press release.

“Social media is agile and nimble and opens a conversation that makes people feel important to the brand,” Pickard said. “But it can also be fluid and out of control. The risk of losing face creates a dampening effect on adoption.”

The notion of control is key. It is precisely the uncontrollable aspect of social media that’s discouraged many from giving it a try.

“The mentality in many Asian cultures is that you want to be in control,” said Kenneth Hong, LG’s global communications director. “And taking risks, such as changing your communication strategy, using digital more is, well, risky.”

Further complicating the matter is the fact that Asian companies tend to be highly hierarchical organizations where experience and seniority often trump enthusiasm and creativity.

As a result, the executives presiding over strategic decisions such as that of developing a social-media presence are often the ones least equipped to do so, lacking an intuitive understanding of the medium and its benefits. And for fear of seeming ignorant, they will often shy away from broaching the topic in the boardroom.

“Behind these numbers and the low adoption of digital media are meetings where for ‘face reason’ social media are not embraced by senior people who may not have an instant feel for it,” Pickard said.

Meanwhile, the incentive for brand managers to push for a social-media strategy is minimal, as the risks far outweigh the potential rewards in most cases.

“From their perspective, you can’t be fired for doing TV. So you do TV and you do print and you reach 98% of the population without having to take a major risk,” said Joe Nguyen, who heads internet research firm ComScore’s Asian operations.

The lack of a precise way to measure the impact of using these new channels doesn’t help the case for a social-media strategy. While a company can track the number of followers its Facebook page has, establishing a link between that number and brand awareness, for instance, takes time and costs money.

“Since the market is relatively new, the firms are unsure of the return of investment,” said Audrey Heng, a Singapore-based analyst with research firm IDC.

As a result, online advertising has been slower to grow in Asia than in other parts of the world. In Singapore, it represented only around 6% of total advertising spending last year. That compares to 24% in the U.K. for the first half of 2010, according to the Internet Advertising Bureau.

Still, there are positive signs. During the global economic downturn, digital spending accelerated in Asia, as budget pressures convinced many firms to give online advertising, which is cheaper than TV, a go. In Singapore, digital advertising spending jumped 26% to S$64.6 million (around $51 million) in 2009, according to the Interactive Advertising Bureau.